III.

Parkson vs Aeon:

1. Introduction to Parkson & Parkson in Vietnam:

Parkson is a member of Lion Group, an international corporation established in 1930 in

Malaysia. Parkson Retail Asia and Parkson Holdings Berhad is currently operating a network of
109 department stores across Malaysia, China, Indonesia and Viet Nam. Being one of the first
international department stores in Vietnam, Parkson has been perceived as a reliable shopping
destination, offering well-known international beauty and fashion brands with standardized
service.

As a subsidiary of Parkson Holdings Bhd., Parkson Retail Asia entered Vietnam in 2005.
Parkson built a network of eight stores in Vietnam's major cities by 2012.

Timeline of Parkson’s stores in Viet Nam:

Parkson Saigon Tourist Plaza ( HCM city): 6/2005 – now

Parkson Hung Vương Plaza ( HCM city) : 29/6/2007 – now

Parkson CT Plaza ( HCM city) : ? - ?

Parkson TD Plaza (Hải Phòng): 2007 - 27/7/2020: sold for Thùy Dương joint stock company

Parkson Viet Tower ( Ha Noi) : 18/4/2008 – 12/2016

Parkson Keangnam (Ha Noi): 2/12/2011 - 1/2015

Parkson Paragon (HCM city): 1/2011 - 5/2016

Parkson Flemington (HCM city): 25/12/2009 -3/2018

Parkson Cantavil (HCM city): 20/12/2013 - 10/2018

Parkson Vĩnh Trung Plaza ( Đà Nẵng): 11/1/2015 – now

However, Parkson's business in Vietnam has been gradually slowing down since 2014 when the
retailer started to lose the upper hand to newcomers who built multi-functional trade complexes
to better meet the demands of different visitors.

The retailer was forced to gradually close its stores, starting with the centre at Keangnam Hanoi
Landmark in 2015. This was followed by Parkson Paragon in 2016, Parkson Viet Tower at the
end of 2016, Parkson Flemington in 2018, and Parkson Cantavil An Phu at the end of 2018.

In order to survive, in April 2019, Parkson renovated its Saigon Tourist Plaza from a “shop and
go” to an “all-in-one destination”.
The vast market of consumers who have increasingly high incomes is the major reason
prompting foreign retailers to flock to Vietnam. However, this might also be the factor that
causes them to wrongly assess the Vietnamese market. One major reason is that the market is
highly attractive and as a result competition is incredibly fierce. According to an analyst the new
malls overtook Parkson in three aspects: retail space, eating areas and entertainment. Their
interiors were more modern and they had more brands, offered more entertainment for families
and had large food courts. Besides while they were nimble and change rapidly to attract visitors,
Parkson seemed to have suffered from inertia.

b. Introduction to Aeon & Aeon in Vietnam:

Recently, AEON is known as one of the largest

retailing groups in the world with over 179 member
companies both inside and outside Japan.

Founded in 1758, AEON Group with its history

spanning over 250 years has one of the longest
histories as a retailer in Japan.

During its operation, AEON Group has kept the

unchanging commitment to putting “Customer First”.
AEON Group’s fundamental principles are the pursuit of prosperous and stable society and
peace through the retail business. Under this corporate accountability, AEON Group has won the
customer’s trust widely and expanded more businesses not only within Japan territory but also in
other countries in Asia for such a long period of time.

AEONCO.,LTD has been involving in many fields such as General Merchandise Store business,
Super Market business, Health & Wellness business , Financial Services Business, Shopping
center Development business, Service & Specialty Store business, international business, shared
function companies and so on. Currently, for these fields, they own many subsidiaries around the
Asian countries, especially China and ASEAN area. In 2019, AEON is reported to have 21,996
stores/locations.

Aeon Mall in Vietnam

AEON has been presented in Vietnam since 2009, at first under format of Representative Office.
on 7th Oct 2011, with the approval from People’s Committee of HCMC, AEON had set up its
Vietnam Company Limited to invest for construction, organization, managements and trading of
modern shopping malls, General Merchandises Stores (GMS), Supermarkets as a core business,
and to carry out other business activities which links with import, export, trading, and researches.

On 12/ 2011, AEON did the market research and tested Vietnamese market by the cooperation
with Trung Nguyen. A joint venture between G7 Mart and Ministop has just been founded.

AEON Mall – Tan Phu Celadon in HCMC is the first one-stop shopping mall in Vietnam
which opened on January 11, 2014

AEON Mall – Binh Duong Canary in Binh Duong Province is launched in Oct 2014.

On 28th Oct, 2015, AEON Mall Long Bien is opened in Hanoi.

On 1st July, 2016, AEON Mall Binh Tan is established and officially operates.

On 5th December, 2019 AEON Mall Hà Đông – the second AEON in Hanoi, is opened.

On 24th December, 2020 AEON MALL Hải Phòng Lê Chân is opened.

Even though they are just a latecomer in Vietnamese market comparing to other foreign
retailers, AEON’s achievement is impressive. After 6 years since first opening in Viet Nam,
AEON reported that their customers averagely increase about 11.5% per year while the revenue
is said to rise 15% per year. In 2019, their revenue is 6553 billion and their profit is 321 billion.
 3. Parkson vs Aeon in term of Understanding culture& Marketing

Parkson Aeon
Business model Normal shopping center Concept of “Towns”, all-in-one
Price Expensive Various prices, mostly cheap
Location Center of the city suburban areas
Target customer Middle-High income medium income customers
customers
Decentralization to the locality Low level High level

a. Concept – business model:

- Parkson's development strategy to Vietnam is to open high-end shopping malls under the
department store model. Moreover, Parkson stores lack the entertainment and dining experiences
offered by modern trade centers and fail to welcome a special type of customer in the social
media era – those who visit malls only for window shopping, selfies and Facebook check-ins,
according to analysts. The boom of online commerce in Vietnam has also allowed people to
easily purchase products from foreign merchants through the Internet, having an adverse impact
on Parkson business, which targets mid-luxury customers.

-Instead of establishing normal shopping centers, Aeon designs their malls following the
concept of "Towns" for local communities, which act as public spaces integrating many benefits
such as entertainment and shopping services for the citizens. This strategy adapted well with
Vietnamese culture. Because when Vietnamese, especially teenagers, go to a shopping store,
they not only want to buy products, but they also seek for the entertainment service or food &
beverage. This is also the key to Aeon’s success in a fierce market as currently. It also improve
purchasing power and expanding the group more customers than just targeting an audience like
Parkson.

b. Price:

- Parkson provides high class products to customers. So the price is also more expensive .

- Aeon applies the strategy to promote their own brands in Vietnam and cooperate with other
brands to satisfy the demand of low-price shopping in Vietnamese market. For them:
“Vietnamese people shop every day. Our know-how in precooked foods and logistics system for
fresh foods developed in Japan are useful. Vietnamese also have stronger faith in the quality of
Japanese products, compared with other ASEAN countries, which is a positive factor for us. We
hope to establish an optimum outlet model soon and expedite future openings.”

c. Location and Target customers

- At the time Parkson first entered to Vietnam, they choose to establish their location at the
center area in order to easily aim at rich and high-income customers. However, just after several
years, Parkson suffered an amount of loss because the high-income customers in Vietnam did not
consume as much as their expectation.

- Distinctive location (friendly image) is another factor contributing to the success of Aeon
Vietnam. In contrast to other large shopping centers located in the center of major cities, Aeon
Mall is mostly developed in suburban areas, where customers can enjoy the feeling of fresh air
and stay away from the crowded cities for a little while. And this is also because they mainly
target the middle class and the medium-income bracket, offer products and floor space to safe,
reassuring products. Some people initially said opening outlets on the outskirts of the city was
risky, but they now feel they are supported by ordinary middle-class consumers and households
with kids. They want to provide offer to local communities and mixing local goods with
imported products.

d. Decentralization to the locality:

-Parkson seemed to be low in decentralization to the locality. There were signals of failure
when they had to close one of their shops in 2015. However, until 2019, they decided to to
change the strategy of the company, from the normal shopping center to all-in-one destination
like Aeon and other competitors. They started with the project of reconstruction of Parkson
Saigon Tourist Plaza from 2019 to 2020. The first floor of this is opened in 31/7/2020.

-Aeon has high level of decentralization to the locality (proximity to location and culture).
Because of their positioning, they need to be careful to monitor and maintain their pricing. For
example, right after they opened the first Vietnamese outlet, they received a lot of complaints
that prices were too high, especially for clothes. So they adjusted to have a wide variety of
products and prices that are suitable for many classes of customers. Or after the Covid pandemic,
Aeon recognized that the demand of cooking at home increased, so they made an effort to
improve the quality and quantity of fresh food to adapt customers’ need.

When they enter in Vietnamese market, Aeon wants to cooperate with small and medium-size
local companies which are in the developing process and already achieved some particular
success. They want two sides can make an effort together to more develop in the future. And it is
because Aeon observes that Vietnamese market fluctuates so much. Although this market has a
huge potential to exploit, there are also the high risks and a lot of challenges. Therefore, to
correctly assess local needs, tie-ups with local companies are useful.

Lesson learned for foreign retailers in Vietnam market:

- The importance of market research: Comparing Parkson with Aeon, as can be seen that
Aeon put a lot of effort in Vietnamese market research. Aeon first came to Vietnam in
2009, but until 5 years later, they just started their first Mall. They also spend much time
to test the market and customers’ need in Vietnam by Ministop (convenience store), a
project cooperated with Trung Nguyen which is started in 2011. Most of foreign retailer
companies who failed in Vietnam just because they do not understand about the market
and customers’ behaviors.
- The concept of “towns” (all in 1): Not only Parkson, but there were also many foreign
retailer companies who failed in Vietnam, such as Auchan. The reason is that they just
simply open normal supper markets or shopping centers while the customers in Vietnam
prefer a shopping center including retailer area, entertainment service like the cinema,
game,… as well as food & beverage service. When going to a shopping center,
Vietnamese also have the need of entertainment or eating-drinking services.
For Vietnamese, shopping center is not only the place to buy stuff, products, but it is also
the place for them to relax, make the appointments with friends. That’s why Aeon can
success in Vietnam market with the concept of town (all in 1), they have everything that
customers need just in an Aeon mall.
And with the development and popularity of online shopping, shopping centers should
apply this concept to make themselves more attractive to appeal customers go to the
centers instead of shopping online. Foreign retailers who want to enter in Vietnam should
consider carefully about this concept.
- Choosing the right Target Customers: From the case of Parkson, as can be seen the
segmentation of high class customers is not potential for foreign retailer companies. At the
first 5 years entering to Vietnam, Parkson seemed to do well. However, many years after
that it became a failure because Parkson estimated wrongly the target customers in
Vietnam, they expected there would be more high class customers buying their products.
 Moreover, Vietnamese people have the mindset that they do not trust the high class
products selling domestically, they prefer to go abroad to buy these items. Vietnamese
believe the products in foreign countries are higher quality than the products sold in
Vietnam even though these products are both high-class.
- The ability to adapt to the local market: Vietnamese retailer market fluctuates so much
every year, the demand of customers becomes more and more various. That is why retailer
companies should adapt to the change of local market.

From Parkson's story, retailers undertake business activities and perform functions that
increase the value of the products and services they sell to consumers.

- Providing Services • Retailers provide services such as credit, product displays, and sales
staff to make it easier for customer to buy and use the product

- Store location • Location is typically the prime consideration in a customer's store choice
and location decisions have strategic importance because they can be used to develop a
sustainable competitive advantage.

- Successful retailers differentiate their retail offerings, build customer loyalty, and develop
a sustainable competitive advantage by providing excellent customer service. Good service
keeps customers returning to a retailer and generates positive word-of-mouth communication,
which attracts new customers.

- Providing high-quality service is difficult for retailers. Automated manufacturing makes

quality of most merchandise consisted from item to item. But the quality of retail service can
vary dramatically from store to store and from salesperson to salesperson within a store.

Parkson Saigon Tourist Plaza ( HCM city): 6/2005 – now

Parkson Hung Vương Plaza ( HCM city) : 29/6/2007 – now

Parkson CT Plaza ( HCM city) : ? - ?

Parkson TD Plaza (Hải Phòng): 2007 - 27/7/2020: sold for Thùy Dương joint stock company

Parkson Viet Tower ( Ha Noi) : 18/4/2008 – 12/2016

Parkson Keangnam (Ha Noi): 2/12/2011 - 1/2015

Parkson Paragon (HCM city): 1/2011 - 5/2016

Parkson Flemington (HCM city): 25/12/2009 -3/2018

Parkson Cantavil (HCM city): 20/12/2013 - 10/2018

Parkson Vĩnh Trung Plaza ( Đà Nẵng): 11/1/2015 – now

AEON has been presented

in Vietnam since 2009, at
first under format of 2009
Representative Office In 2011, AEON
cooperated with Trung
2011 Nguyên to do the project
Ministop in Vietnam

On 11st January, 2014,

AEON Mall – Tân Phú In October, 2014, AEON
Celadon in HCMC is opened. Mall Bình Dương Canary
2014 is launched

On 28th Oct, 2015, AEON 2015

Mall Long Biên is opened
On 1st July, 2016,
2016 AEON Mall Bình Tân is
opened

On 5th December, 2019

AEON Mall Hà Đông is 2019
opened
On 24th December, 2020
2020 AEON MALL Hải Phòng Lê
Chân is opened